Labor law in Germany: 6 differences with the Netherlands

1. Probationary period

Just like Dutch labor law, German labor law also has a probationary period (in German: Probezeit ). In Germany the probationary period may be a maximum of 6 months. During this period, both you and the employee can terminate the employment contract. A reduced notice period of two weeks then applies. Does the employment contract not include anything about a probationary period? Then the statutory notice period applies.

2. Contract for a (in)definite period

Unlike in the Netherlands, a permanent contract is the norm in Germany. A temporary contract is allowed, but only for a period of two years. Longer is only allowed if you have a special reason (in German: Sachgrund).

For example, because it concerns a project or the replacement of a sick or pregnant employee. In both cases, the agreement that it is a temporary contract must be recorded in writing in advance. An early termination of a temporary contract is only possible if this has been agreed or if it is stated in the applicable collective labor agreement.

In order to compete on the German labor market, it is therefore advisable to work with permanent contracts as much as possible. In general, this does not have to be a problem, as you can work with a probationary period of 6 months and dismissal law in Germany is in many cases considerably more flexible than in the Netherlands (see point 4).

3. Illness and reintegration

When it comes to illness and reintegration, there are major differences between Dutch and German labor law. For example, while in the Netherlands you as an employer are obliged to pay the employee for two years in the event of illness, in Germany this is only six weeks. After this period, the employee's health insurance takes over, up to a maximum of 72 weeks. The employee then receives a benefit.

And while Dutch labor law has a ban on dismissal during the first two years of illness, German law has no such ban. Under German law, frequent or long-term illness can be a socially justifiable reason for dismissal. You must then meet a number of conditions.

4. Dismissal

Do you have no more than 10 employees? Then in many cases you can terminate an employment contract quite easily in Germany. To do this, you only need to observe the contractual or statutory notice period. This means that German employees have less dismissal protection than Dutch employees.

Please note that most German employees contact a lawyer in the event of dismissal. In Germany, they must initiate proceedings within three weeks of receiving a dismissal letter, otherwise their rights will lapse. 95% of these procedures are suitable. So don't worry; You will not face long and expensive legal proceedings.

From the eleventh employee onwards, employees in Germany have broader dismissal protection.

5. Dismissal and transition compensation

Are you saying goodbye to an employee? Then, unlike in the Netherlands, as an employer in Germany you are not always obliged to pay a transition compensation. In Germany it is therefore possible to unilaterally terminate the employment contract without payment of any form of compensation.

Will an employment law conflict come to trial? And does it appear that the dismissal is not legally valid? In Germany, people often opt for a buyout arrangement. The amount of a lump sum payment depends on the individual situation of the employee, where the duration of the employment contract also plays a role.

6. Non-competition and non-solicitation clauses

German law also differs considerably from Dutch law when it comes to post-contractual non-competition and non-solicitation clauses. But unlike many other subjects, law and case law in Germany are stricter on this point than in the Netherlands.

For example, as an employer you may only include a post-contractual non-competition clause in a German employment contract if you offer your (former) employee compensation (in German: Karenzentschädigung) for this. This compensation is the total or pro rata compensation for the duration of the non-competition clause and must be at least 50% of the last earned salary. Is the provision regarding the Karenzentschädigung missing from the employment contract? Then the non-competition clause is invalid.

Also read: The salary and employment conditions in Germany: this is what you need to know

Need advice?

Do you employ German staff? Or are you going to hire staff in Germany for the first time?

Then Heisterborg International is happy to help you. Our team of employment law and HR specialists is familiar with both Dutch and German employment law and is fully bilingual. This unique combination makes it possible to explain the differences to you in detail and to provide you with good advice.

And did you know that you can use Heisterborg International as your external HR department? We will then take care of everything in the field of HR and personnel for you. From answering questions from staff, salary negotiations and drawing up employment contracts to registering staff and payroll administration: you don't have to worry about it.